Spreading the risk
SLI has a wide range of business strategies, geographies and commercial partners. Has that helped protect the firm from the problems most fund managers have faced since the start of 2016?
“We are positive net sales since the start of the year. If you look at global flows since the start of the year for all asset managers, there’s been a big move of money into cash. I’ve spoken to quite a few of my counterparts in other fund management groups and if you’ve had positive sales then you’ve had a good start to the year, irrespective of what numbers you were hoping to reach.
“This is also down to the diversification agenda. We know many groups have just one blockbuster fund. If that fund underperforms or gets on the wrong side of a hostile market and gets sold then you’ve got nowhere to go.”
While that might sound exactly like the situation SLI finds itself in, Barker insists that this is not the case.
“We are not in that position because we have a broad base of support. The Gars process spins off into other asset classes. People who have bought Gars will buy other things from us on the back of understanding how we run money. “
Nonetheless, SLI is not completely immune to the problems facing fund managers generally.
“We all experience headwinds and tailwinds from time to time. There is certainly an industry headwind and the volatility of markets is one reason. There are also regulatory reasons as well, like Mifid II and political issues like Brexit.”
So does SLI see Brexit as a potential threat to its bottom line? “From a business point of view, we are positive about staying in Europe,” says Barker. “Of course, we are not political but that is our commercial point of view.
“Having said that, we have set up our business to be global. The hubs we have in Hong Kong, the Sicav out of Luxembourg, the Cayman Island funds, the 40-Act funds in the US… Obviously, being Edinburgh-based we are involved in the Brexit question but we are not permanently tied to being a UK business. I think we are in a good position. We are making sure our business is prepared when the vote comes.”
